Banks refuse to put in place accounts that help benefit claimants

Banks are reportedly unwilling to offer current accounts which help people claiming benefits to budget their money, despite an offer of £145 million towards the cost from the Department of Work and Pensions (DWP).

The Government asked the high street banks to develop accounts in which money could be allocated into different sections, such as savings and bill payments, to make budgeting easier. But banks have responded that this would be too complicated and expensive, even with DWP investment. 

Banks are reportedly unwilling to offer current accounts which help people claiming benefits to budget their money, despite an offer of £145 million towards the cost from the Department of Work and Pensions (DWP).

The Government asked the high street banks to develop accounts in which money could be allocated into different sections, such as savings and bill payments, to make budgeting easier. But banks have responded that this would be too complicated and expensive, even with DWP investment. 

Under the new Universal Credit arrangements – which have started in four London boroughs and will roll out across the rest of the country later this year – all benefits will be received in a single monthly payment, rather than weekly or fortnightly.  This means that people on benefits will have to budget to pay all their bills, including rent, energy and food, across a month.

Many claimants and professionals working in the field believe – and have told DWP – that this will cause serious difficulties for some people.  They warn that many people who struggle to budget their benefits payments will become easy prey to illegal money lenders and short-term high interest lenders which do not carry out credit checks or ask about sources of income.

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